Sales

US new-home sales surge to fastest pace since 2006 as housing market shines through pandemic



a car parked in front of a sign: Associated Press


© Associated Press
Associated Press

  • Sales of new US homes accelerated by 4.8% in August, to an annual rate of 1 million units, the Census Bureau reported Thursday.
  • That rate was the highest since 2006 and marked four consecutive months of increasing sales.
  • The agency’s estimate of new homes for sale fell to 282,000, reflecting 3.3 months of supply at the current pace of sales. That’s the shortest period in data going back to 1963.
  • Though the housing market has been one of the few bright spots in the virus-rattled economy, some fear that dwindling supply will soon halt the sector’s rally.
  • Visit the Business Insider homepage for more stories.

The US housing market extended its winning streak into August as Americans continued taking advantage of record-low mortgage rates.

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Sales of new homes leaped by 4.8%, to a seasonally adjusted annual rate of 1.01 million units, the Census Bureau announced Thursday. The rate was the highest since 2006 and marked four months of increases. Economists surveyed by Bloomberg had expected the rate to drop last month to 890,000 units.

New homes’ median sale price fell from the year-ago period, to $312,800. The average sale price was $369,000.

Read more: Legendary investor Mark Mobius told us his process for finding the most exciting bargains in far-flung markets around the world amid the COVID-19 crisis — and shared his 5 top stock picks right now

July’s jump was revised higher, to a 14.7% gain.

The Thursday report also revealed a growing strain in housing supply. The seasonally adjusted estimate of new homes for sale fell to 282,000 from 291,000. The latest reading represented a supply of 3.3 months at the housing market’s current rate of sales, the shortest period in data going back to 1963.

The housing market has been

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U.S. existing home sales approach 14-year high; prices scale record peak

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. home sales surged to their highest level in nearly 14 years in August as the housing market continued to outperform the overall economy, but record high home prices could squeeze first-time buyers out of the market.

The report from the National Association of Realtors confirmed home sales had recovered after slumping when the economy almost ground to a halt as businesses were shuttered in mid-March in an effort to slow the spread of COVID-19.

Demand for housing is being fueled by record-low mortgage rates and a pandemic-fueled migration to suburbs and low-density areas in search of more spacious accommodation as many people work from home. Federal Reserve Chair Jerome Powell told a congressional panel on Tuesday that the economy has shown “marked improvement” since plunging into recession in February, though the path ahead remains uncertain.

“The housing market has continued its remarkable recovery amidst an otherwise fraught economy that has been battered by the pandemic,” said John Pataky, executive vice president at TIAA Bank in Jacksonville, Florida.

“However, we should continue to be paranoid about the sustainability of sales. With lack of housing supply, there is an upward pressure on home prices which threatens to detract the benefits accrued from low mortgage rates.”

  Existing home sales increased 2.4% to a seasonally adjusted annual rate of 6 million units last month, the highest level since December 2006. August’s increase in homes sales, which marked three straight months of gains, was in line with economists’ expectations.

The median existing house price jumped 11.4% from a year ago to a record $310,600 in August. Sales last month were concentrated in the $250,000 to $1 million and over price range, with transactions below the $250,000 price band down sharply.

Existing home sales, which account for the bulk

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New Home Sales Strongest Since 2006: Top 7 Housing Stocks

Sales of new single-family homes exceeded 1 million in August 2020, marking the highest level since September 2006. The metric, which has been rising for four consecutive months, exceeded analysts’ expectation by 13.6%.

The U.S. housing market has shown a resilient performance over the past few months despite ambivalent market predictions and fears of a second wave of the virus. Not only did the industry offset these COVID-19-related headwinds but also tackled lumber price swings, mortgage delinquencies, U.S.-China trade spat, labor shortage and inflating land prices.

This industry has experienced a strong V-shaped recovery since May and its growth is now exceeding pre-pandemic levels fueled by the work-from-home initiative and record low mortgage rates.

Since May, the Zacks Building Products – Home Builders industry has improved 57.1% compared with the Zacks Construction sector and S&P 500 composite’s 35% and 14.6% rally, respectively.

Inside the Numbers

August new home sales increased 4.8% to a seasonally adjusted annual rate of 1,011,000 from an upwardly-revised July rate of 965,000 units. Also, the sales pace was 43.2% higher than the year-ago period.

Regionally, the metric rose in Northeast and South (accounting for bulk of transactions) by 5% and 13.4%, respectively. Sales in the Midwest and West, however, dropped 21.4% and 1.7%, respectively, in August. Nonetheless, sales in all the four regions increased in double digits from the August 2019 level.

Median sales price in August was $312,800, which fell 4.6% month over month and 4.3% from the year-ago level. Average sales price of $369,000 also declined 0.8% from the prior month and 6% from August 2019.

August housing inventory decreased 3.1% from July and 13.2% from the year-ago period to 282,000. It would take just 3.3 months to deplete the current supply of homes, down from 3.6 months in July and 5.5 months in

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U.S. Existing Home Sales Approach 14-Year High; Prices Scale Record Peak | Investing News

WASHINGTON (Reuters) – U.S. home sales surged to their highest level in nearly 14 years in August as the housing market continued to outperform the overall economy, but record high home prices could squeeze first-time buyers out of the market.

The report from the National Association of Realtors confirmed home sales had recovered after slumping when the economy almost ground to a halt as businesses were shuttered in mid-March in an effort to slow the spread of COVID-19.

Demand for housing is being fueled by record-low mortgage rates and a pandemic-fueled migration to suburbs and low-density areas in search of more spacious accommodation as many people work from home. Federal Reserve Chair Jerome Powell told a congressional panel on Tuesday that the economy has shown “marked improvement” since plunging into recession in February, though the path ahead remains uncertain.

“The housing market has continued its remarkable recovery amidst an otherwise fraught economy that has been battered by the pandemic,” said John Pataky, executive vice president at TIAA Bank in Jacksonville, Florida.

“However, we should continue to be paranoid about the sustainability of sales. With lack of housing supply, there is an upward pressure on home prices which threatens to detract the benefits accrued from low mortgage rates.”

  Existing home sales increased 2.4% to a seasonally adjusted annual rate of 6 million units last month, the highest level since December 2006. August’s increase in homes sales, which marked three straight months of gains, was in line with economists’ expectations.

The median existing house price jumped 11.4% from a year ago to a record $310,600 in August. Sales last month were concentrated in the $250,000 to $1 million and over price range, with transactions below the $250,000 price band down sharply.

Existing home sales, which account for the bulk of U.S. home

Continue Reading